Primo Brands CorpPRMB
Primo Brands Corp Stock Compensation Disclosure
STOCK-BASED COMPENSATION
Primo Brands Corporation Equity Incentive Plan
In November 2024, the Company adopted the Primo Brands Corporation Equity Incentive Plan (the "2024 Equity Plan"). Awards under the 2024 Equity Plan may be in the form of incentive stock options, non-qualified stock options, restricted shares, stock appreciation rights, restricted share units, performance shares, performance units, unrestricted shares, and other stock or cash-based awards to the Company’s employees, officers, directors, consultants, and advisors. The 2024 Plan is administered by the Compensation Committee of the Board of Directors (the "Compensation Committee") or any other Board committee as may be designated by the Board of Directors from time to time. The 2024 Equity Plan includes an initial reserve of 38,000,000 shares of Class A common stock authorized for issuance under the plan, subject to adjustment in connection with changes in capitalization, reorganization, and change in control events, which will automatically increase on
the first day of each calendar year beginning on January 1, 2026 and ending on and including January 1, 2034 by an amount equal to the lesser of (i) 5% of the aggregate number of shares of Class A common stock and Class B common stock of the Company issued and outstanding on the day immediately preceding the applicable date, or (ii) such smaller amount determined by the Board. Shares that are issued under the 2024 Equity Plan that are forfeited, expired, or are canceled or settled without the issuance of shares return to the pool of shares available for issuance under the 2024 Equity Plan. As of December 31, 2025, there were 34,583,251 shares available for future issuance under the 2024 Equity Plan.
Legacy Primo Water Equity Incentive Plans
In connection with the Transaction, the Company adopted the Legacy Primo Water Corporation Equity Incentive Plan (the “Legacy Equity Plan”) and the Legacy Primo Water Corporation 2018 Equity Incentive Plan (the “Legacy 2018 Equity Plan”, and together with the Legacy Equity Plan, the “Legacy Equity Plans”) which assumed the outstanding Primo Water equity incentive awards and issued corresponding replacement awards with respect to the Company's Class A common stock. The Company does not expect to issue any additional awards under the Legacy Equity Plans going forward. The Legacy Equity Plans are administered by the Compensation Committee or any other Board committee as may be designated by the Board of Directors from time to time.
Stock-Based Compensation Expense
Stock-based compensation expense is recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations. As referenced below: (i) “Performance-based RSUs” represent restricted share units with performance-based vesting, (ii) “Time-based RSUs” represent restricted share units with time-based vesting, (iii) “Stock options” represent non-qualified stock options, (iv) “Other awards” represent common shares issued in consideration of the annual Board retainer fee to non-management members of our Board, profit interest units in Triton Water Parent Holdings, LP with time-based vesting ("Time-based PIUs"), and profit interest units in Triton Water Parent Holdings, LP with time- and performance-based vesting ("Performance-based PIUs").
The table below summarizes the stock-based compensation expense for the years then ended:
| For the Year Ended December 31, | |||||||||||||||||
($ in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Performance-based RSUs | 15.7 | 0.4 | — | ||||||||||||||
| Time-based RSUs | 26.2 | 6.9 | — | ||||||||||||||
Other awards | 5.3 | 1.5 | 1.3 | ||||||||||||||
| ESPP | 2.7 | — | — | ||||||||||||||
Total 1 | $ | 49.9 | $ | 8.8 | $ | 1.3 | |||||||||||
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1 Includes $0.1 million of stock-based compensation expense for the year ended December 31, 2024 associated with the Company's discontinued operations, which is included in Net income (loss) from discontinued operations, net of income taxes on the Consolidated Statements of Operations.
The tax benefit recognized related to stock-based compensation expense for the year ended December 31, 2025 and December 31, 2024 was $2.9 million and $3.5 million, respectively. There was no tax benefit recognized related to stock-based compensation expense for the year ended December 31, 2023.
As of December 31, 2025, the unrecognized share-based compensation expense and the weighted-average number of years over which the expense will be recognized were as follows:
($ in millions, except years) | Unrecognized stock-based compensation expense | Weighted-average years expected to recognize expense | |||||||||
| Performance-based RSUs | $ | 48.3 | 2.6 | ||||||||
| Time-based RSUs | 19.0 | 1.4 | |||||||||
Other awards | 3.0 | 1.4 | |||||||||
| Total | $ | 70.3 | |||||||||
Stock Options
The Company did not grant any stock options during the year ended December 31, 2025. The contractual term of a stock option is fixed by the Legacy Equity Plans and cannot exceed ten years from the original grant date. The following table summarizes the activity for stock options for the periods presented:
($ in millions, except years) | Number of Stock options (in thousands) | Weighted-average exercise price | Weighted-average contractual term (years) | Aggregate intrinsic value (in thousands) | |||||||||||||||||||
Outstanding as of December 31, 2023 | — | $ | — | — | $ | — | |||||||||||||||||
Replacement awards in conjunction with the Transaction | 1,195 | $ | 14.31 | ||||||||||||||||||||
| Exercised | (127) | $ | 15.05 | $ | 1,810.8 | ||||||||||||||||||
Outstanding as of December 31, 2024 | 1,068 | $ | 14.21 | 3.6 | $ | 17,679.5 | |||||||||||||||||
| Exercised | (288) | $ | 13.73 | $ | 4,527.4 | ||||||||||||||||||
Outstanding as of December 31, 2025 | 780 | $ | 14.39 | 2.2 | $ | 1,659.9 | |||||||||||||||||
Exercisable as of December 31, 2025 | 780 | $ | 14.39 | 2.2 | $ | 1,659.9 | |||||||||||||||||
Vested or expected to vest as of December 31, 2025 | 780 | $ | 14.39 | 2.2 | $ | 1,659.9 | |||||||||||||||||
The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company's Class A common stock on the New York Stock Exchange ("NYSE") on December 31, 2025, which was $16.35, and the exercise price, multiplied by the number of in-the-money stock options as of the same date.
The total amount of cash received from the exercise of stock options during the years ended December 31, 2025 and December 31, 2024 was $2.4 million and $1.9 million, respectively, with an associated tax benefit of $1.0 million and $0.5 million, respectively. No options vested during the years ending December 31, 2025 and December 31, 2024.
Time- and Performance-Based RSUs
In connection with the Transaction, the Company granted 3,287,966 Time-based RSUs as replacement awards for those held by Primo Water employees prior to the Transaction. The replacement awards included 793,040 Time-based RSUs and 2,494,926 Performance-based RSUs converted to Time-based RSUs. Each Primo Water Performance-based RSU was automatically assumed and converted into a Primo Brands Time-based RSU on substantially the same terms and conditions as immediately prior to the Transaction, except that the number of Class A common stock subject to the Primo Brands Time-based RSU was equal to the number of Primo Water shares underlying such Primo Water Performance-based RSU, as determined by the Board prior to the Transaction based on the expected performance of Primo Water for the performance period. The Performance-based RSUs were converted at 191.4% for the 2022 grants, 170.4% for the 2023 grants and 187.25% for the 2024 grants. The fair value of the replacement Time-based RSUs was $24.21 per share based on the quoted market price of Primo Water common shares on the NYSE on November 8, 2024. The Time-based RSUs have a time-based vesting period equal to the remaining vesting period for the original awards.
During the year ended December 31, 2025, the Company granted 1,094,123 Time-based RSUs. The fair value of the Time-based RSUs is based on the quoted market price of PRMB shares on the NYSE as of the grant date, which awards vest over
three years in equal annual installments on the first, second and third anniversaries of the date of grant and include a service condition.
Additionally, during the year ended December 31, 2025, the Company granted 1,917,537 Performance-based RSUs which vest at the end of a three-year performance period beginning on the first day of the Company's 2026 fiscal year and ending on the last day of our 2028 fiscal year ("2026 Performance Awards"). Performance-based RSUs granted during the year ending December 31, 2024, vest at the end of a three-year performance period beginning on the first day of the Company's 2025 fiscal year and ending on the last day of our 2027 fiscal year ("2025 Performance Awards"). The number of shares ultimately awarded will be based upon the performance payout rate, which can range from 0% to 200% of the awards granted and is based on the Company’s achievement total shareholder return (“TSR”) relative to the TSR attained by companies within the Company's defined peer group for the applicable performance period (the “Performance Objective”). The number of Performance-based RSUs that may vest, and the related unrecognized compensation cost is subject to change based on the Performance Objectives achieved during the vesting period.
The grant date fair values of the 2026 and 2025 Performance Awards granted during the years ended December 31, 2025 and December 31, 2024 were estimated at the following grant dates using the Monte-Carlo simulation model with the following weighted-average assumptions:
| December 10, 2025 | November 7, 2025 | February 21, 2025 | December 10, 2024 | ||||||||||||||||||||
| Risk-free interest rate | 3.5 | % | 3.5 | % | 4.1 | % | 4.0 | % | |||||||||||||||
| Average expected life (years) | 3.1 | 3.2 | 2.9 | 3.1 | |||||||||||||||||||
| Expected volatility | 33.2 | % | 33.3 | % | 27.8 | % | 28.3 | % | |||||||||||||||
The risk-free rate is based on the U.S. Treasury yield in effect at the grant date with a term equal to the simulation period used in the Monte-Carlo simulation model. The simulation period is equal to the performance periods associated with the performance shares. Volatility is based on the Company's historical share price data.
The following table summarizes the activity for the Company's Time- and Performance-based RSUs:
| Number of Performance-based RSUs (in thousands) | Weighted-average grant date fair value | Number of Time-based RSUs (in thousands) | Weighted-average grant date fair value | ||||||||||||||||||||
Outstanding as of December 31, 2023 | — | $ | — | — | — | ||||||||||||||||||
Replacement awards in conjunction with the Transaction | — | $ | — | 3,288 | $ | 24.21 | |||||||||||||||||
| Awarded | 465 | $ | 44.23 | 240 | $ | 31.73 | |||||||||||||||||
| Issued | — | $ | — | (971) | $ | 24.21 | |||||||||||||||||
| Outstanding as of December 31, 2024 | 465 | $ | 44.23 | 2,557 | $ | 24.91 | |||||||||||||||||
| Awarded | 1,918 | $ | 28.50 | 1,094 | $ | 19.60 | |||||||||||||||||
| Issued | — | $ | — | (1,559) | $ | 25.12 | |||||||||||||||||
| Forfeited | (230) | $ | 46.25 | (106) | $ | 31.30 | |||||||||||||||||
Outstanding as of December 31, 2025 | 2,153 | $ | 29.93 | 1,986 | $ | 21.48 | |||||||||||||||||
Vested or expected to vest as of December 31, 2025 | 1,448 | $ | 20.56 | 1,986 | $ | 21.48 | |||||||||||||||||
The total fair value of Time-based RSUs vested and issued during the year ended December 31, 2025 and December 31, 2024 was $39.2 million and $23.5 million, respectively.
Other Awards
Certain employees of BlueTriton were granted Class B units in Triton Water Parent Holdings, LP as PIUs, which consisted of a combination of time-based PIUs (approximately 1/2 of the PIUs) and performance-based PIUs (approximately 1/2 of the PIUs). Fifty percent (50%) of the time-based PIUs generally vest on the second anniversary of the vesting commencement date, and sixteen and two-thirds percent (16 2/3%) will vest on the third, fourth, and fifth anniversaries of the vesting commencement date. Performance-based PIUs will vest based on the return on investment by the investors of Triton Water Parent Holdings, LP, at the time of an exit transaction or final sale.
During the year ended December 31, 2025, the Company granted 64,813 shares of Class A common stock with an aggregate grant date fair value of approximately $2.0 million to the non-management members of its Board of Directors under the Primo Brands Corporation Equity Incentive Plan. The shares of Class A common stock were issued in consideration of the directors’ fees and were fully vested upon issuance or deferral.
In November 2024, the Company adopted the Primo Brands Corporation Employee Share Purchase Plan (the “ESPP”). The ESPP qualifies as an “employee share purchase plan” under Section 423 of the Internal Revenue Code of 1986 (“IRC”), as amended. Substantially all employees are eligible to participate in the ESPP and may elect to participate at the beginning of any quarterly offering period. The ESPP authorizes the issuance, and the purchase by eligible employees, of up to 7,600,000 shares of Primo Brands Class A common stock through payroll deductions. The ESPP provides that the number of shares reserved and available for issuance will automatically increase on January 1 of each calendar year from January 1, 2026 through January 1, 2034 by an amount equal to the lesser of (i) 1% of the aggregate number of Class A common stock and Class B common stock on the immediately preceding December 31 and (ii) such lesser number of shares of common stock as determined by the Board. As of December 31, 2025, 7,244,554 shares remained available for issuance under the ESPP. Eligible employees who choose to participate may purchase Primo Brands Class A common stock at 85% of the market value on the first or last day of the quarterly offering period, whichever is lower. The minimum contribution which an eligible employee may make under the ESPP is 1% of the employee’s eligible compensation, with the maximum contribution limited to 15% of the employee’s eligible compensation. At the end of each quarterly offering period for which the employee participates, the total amount of each employee’s payroll deduction for that offering period will be used to purchase Primo Brands Class A common stock.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.